MARINE PETROLEUM COMPANY, Appellant, v. CHAMPLIN PETROLEUM COMPANY et al.
No. 77-1345.
United States Court of Appeals, District of Columbia Circuit.
Argued Feb. 14, 1978. Decided April 12, 1979.
Rehearing Denied May 30, 1980.
641 F.2d 984
CONCLUSION
I cannot agree that the Commission acted arbitrarily or capriciously in denying a hearing in this case. There were, in my opinion, no material, substantial questions of fact left unanswered that required a hearing to resolve. In this case the basic issue of the applicants’ intent to continue to serve the Ogden community as their primary audience was clearly one which could be decided upon inferences drawn from known facts. Some might disagree with the Commission‘s decision, but that is an altogether separate issue from holding that it was required to hold a hearing before drawing those inferences. For my own part, I believe that on this record the Commission acted entirely reasonably in finding that the change in antenna location was an effort to improve coverage to the stations’ primary Ogden market, not an attempt to corner a new Salt Lake City market in defiance of the Commission‘s Berwick/de facto reallocation policy. The Commission did not need to hold a hearing to so decide. I therefore respectfully dissent.*
ming to determine whether a Berwick/de facto reallocation issue really exists. See, e. g., Garlund, Gareth & Anna W. (KIQO), 68 FCC2d 1382, 1384 (1978); General Media Television, Inc., 27 FCC2d 861, 863 (1971); Streets Electronics, Inc. (KGEO-TV), 20 FCC 1121, 1169 (1956). The importance of the local programming factor cannot be ignored, since it goes to the heart of the statutory policy governing the distribution of radio licenses. See En Banc Programming Inquiry, 44 FCC 2303, 2311 (1960):
* After this dissenting opinion was filed, the majority opinion was revised so that it no longer requires a full evidentiary hearing on remand. Despite this revision, of which I approve, the gist of the dissent still seems relevant to any proceedings on remand.
It is generally recognized that programming is of the essence of radio service. Section 307(b) of the Communications Act requires the Commission to “make such distribution of licenses ... among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same.” Under this section the Commission has consistently licensed stations with the end objective of either providing new or additional programming service to a community, area or state, or of providing a new or additional “outlet” for broadcasting from a community, area, or state.... [A]ppropriate attention to local live programming is required.
(emphasis in original).
Richmond C. Coburn, St. Louis, Mo., of the bar of the Supreme Court of Missouri, pro hac vice by special leave of Court, with whom Donald B. Craven, Washington, D. C., was on brief, for appellee.
Before ROBINSON, MacKINNON and ROBB, Circuit Judges.
Opinion for the Court filed by SPOTTSWOOD W. ROBINSON, III, Circuit Judge.
SPOTTSWOOD W. ROBINSON, III, Circuit Judge:
Marine Petroleum Company, a marketer of motor gasoline, sued Champlin Petroleum Company, a producer and refiner, in the Eastern District of Missouri for alleged violation of federal price regulations. During the pendency of the action, Marine sought an order from the District Court for the District of Columbia compelling Charles R. Owens, Champlin‘s independent consultant on energy matters, to answer questions propounded to him during the course of a deposition at Champlin‘s instance. In reliance upon
The District Court ruled that Marine could have orthodox discovery of facts known or opinions held by Owens prior to the time at which he began to devote his talents to the litigation precipitated by Marine, but not with respect to information developed thereafter.2 Marine now appeals from this limitation on a deposition from Owens.3 We affirm.
I
In March, 1975, Marine filed with the Federal Energy Administration (FEA) a complaint against Champlin and its parent company, Union Pacific Corporation, charging violations of petroleum price regula-
Marine subsequently deposed Owens in the District of Columbia. At the deposition session, objection was interposed to any and all questions relating to Owens’ activities in Champlin‘s behalf. The contention was that Owens had been hired not only in the capacity mentioned but also in expectation of litigation over Champlin‘s observance of FEA regulations. It was further represented that Owens had from time to time conferred with Champlin‘s attorneys on that very subject, and on matters highly relevant to Marine‘s lawsuit. On this ground, and on advice of counsel, Owens refused to answer questions pertaining to his work for Champlin, or to produce any documents save those bearing on his initial hiring by Champlin.
Marine applied to the District Court for the District of Columbia for an order compelling discovery, and there the basic features of Owens’ relationship with Champlin came to light. Owens’ professional connection with Champlin began in the fall of 1974, when Champlin engaged his consulting firm. The firm obligated itself to follow events and analyze changing conditions impacting Champlin‘s interest and upon request to provide insights helpful to its planning and decisionmaking processes.7 The parties settled on a monthly retainer for routine service and a guaranty of the firm‘s availability on a minimum of two and one-half days per month for special assignments, and to a schedule of additional fees for work done by particular firm personnel on days dedicated to Champlin.8
For the first ten months, the relationship continued along these lines. Later, on July 7, 1975, however, after Champlin had received an “issue letter” from FEA informing it that it might be in violation of the petroleum price regulations as Marine had charged, Champlin decided to expand Owens’ responsibilities to include assistance in regard to that matter. For sometime onward, then, Owens wore two hats that of a general consultant and that of an expert engaged in preparation for litigation.9
The District Court allowed inquiry into facts known and opinions held by Owens prior to his assignment to the Marine litigation, but barred interrogation of Owens on Champlin-related subjects beyond that point.10 Marine appealed this partial denial of its discovery request. Prior to oral argument before this court, Marine further deposed Owens to the extent permitted by the District Court‘s order and now seeks to explore Owens’ post-assignment knowledge. Our review of the District Court‘s action is of course limited correspondingly.
Discovery into facts possessed and opinions entertained by an adversary‘s expert is now regulated by the Federal Rules of Civil Procedure. The governing principles are set forth in Rule 26(b)(4),11 a product of comprehensive revision and reorganization of the discovery process in 1970,12 and the climax of an era of judicial disagreement and changing sentiment.13 It is useful at the outset to briefly outline the current scheme of federal civil discovery as a part of the backdrop against which the claims in suit must be assessed.14
Rule 26(b)(4) is in terms confined in operation to quests for “facts known and opinions held by experts, ... acquired or developed in anticipation of litigation or for trial.”15 Thus, one who, though an expert, derives his information simply as “an actor or viewer with respect to transactions or occurrences that are part of the subject matter of the lawsuit ... should be treated as an ordinary witness.”16 Rule 26(b)(4) does, however, apply full force to “discovery of information obtained by a party from an expert retained by that party in relation to litigation or obtained by the expert and not yet transmitted to the party.”17 Subject to this limitation, as even the barest inspection will disclose, the rule “deals separately with those experts whom the party expects to call as trial witnesses and with those experts who have been retained or specially employed by the party who are not expected to be witnesses.”18
Experts within the first category are embraced by Rule 26(b)(4)(A). It specifies that “[a] party may through interroga-
Experts who are not prospective trial witnesses are treated very differently, however. The relevant provision is Rule 26(b)(4)(B):
A party may discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only as provided in Rule 35(b)22 or upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.23
As is apparent, Rule 26(b)(4)(B) imposes a partial though not a total ban on fact- or opinion-discovery from a nontestifying expert. It eschews a policy of categorical inaccessibility to such information in favor of a carefully circumscribed opportunity for discovery. To invoke its protection, the expert must have “been retained or specially employed by another party in anticipation of litigation or preparation for trial,”24 and the data sought to be discovered must have been “acquired or developed in anticipation of litigation or for trial.”25 Even if the involved material is of that nature, the party desiring discovery may still be able to pierce the shield of immunity. This feat is accomplished by establishing “exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.”26
Rule 26(b)(4)(B), however, “is concerned only with experts retained or specially consulted in relation to trial preparation.” It thus “precludes discovery against experts who were informally consulted in preparation for trial, but not retained or specially employed. As an ancillary procedure, a party may on a proper showing require the other party to name experts retained or specially employed, but not those informally consulted.”27
Such, then, is the general scheme of discovery from experts. Two additional considerations should be noted. One is the precondition, obtaining with respect to both testifying and nontestifying experts, that the material sought be “otherwise discoverable under the provisions of” Rule 26(b)(1).28 The other is that a litigant who succeeds in securing discovery from an expert does not necessarily get a free financial ride. Save only with respect to experts regularly employed by his adversary and to discovery accomplished by interrogatories, the court is empowered to require payment or sharing of the fees and expenses incidental to the expert‘s services.29
In the order complained of, the District Court found that “Owens was specially employed by ... Champlin ... as an expert in anticipation of litigation on or about July 7, 1975,”30 that Champlin did not intend to call Owens as a witness in the Missouri action,31 and “that no exceptional circumstances ... under which it is impracticable for [Marine] to obtain facts and opinions on the same subject by other means have been shown.”32 Accordingly, the court held that Marine “may discover facts known or opinions held by ... Owens prior to his special employment as an expert in anticipation of litigation that are relevant to the subject matter of this lawsuit and not otherwise privileged.”33 Beyond that, however, Marine‘s discovery motion was denied.34
Marine does not contest the District Court‘s finding that Owens will not be used as a witness in the main litigation but, in a three-pronged attack, it does challenge the court‘s determinations in all other respects. Our review authority, of course, is quite limited. Trial courts have a broad discretion in discovery matters and appellate courts will reverse only for abuse35 for “action which is arbitrary, fanciful, or clear-
ly unreasonable.”36 This standard applies equally to discovery sought in a proceeding ancillary to the principal action,37 and by our appraisal of the record Marine does not survive it.38
One of Marine‘s contentions is that the record does not support the holding that Owens was retained as an expert in anticipation of litigation. As Marine correctly observes, from September, 1974, to July, 1975, Owens was a general energy advisor rather than a litigational expert for Champlin, but the District Court had ample warrant for the conclusion that there came a time when the relationship changed radically. An uncontroverted affidavit by Champlin‘s general counsel avows that (a) at a meeting of legal and other representatives of Champlin on July 7, 1975 after Marine‘s FEA complaint and FEA‘s issue letter the suggestion was made “that Champlin employ specially ... Owens ... pursuant to Champlin‘s contract with that firm ... as an expert in Federal Energy Administration regulatory matters to assist Champlin in anticipation of the litigation which Champlin then faced and to aid Champlin in its preparation for the trial of said litigation;”39 that “Owens agreed to
Nonetheless, Marine asserts that not even the altered and expanded responsibilities thus assumed by Owens brought him within the ambit of Rule 26(b)(4)(B). Marine points out that FEA did not issue a notice of possible violation until October 21, 1975, and that Marine did not file its lawsuit until seven days later, and on that basis Marine questions whether any litigation was extant when Owens took on his new duties. We are satisfied, however, that with Marine‘s complaint filed with FEA and the agency‘s issue letter in hand, enough of a foreboding nature had transpired by that time to support the District Court‘s determination that Owens had been “specially employed by ... Champlin ... as an expert in anticipation of litigation ...”42 and the rule demands no more.43
Marine also argues that notwithstanding Owens’ activities in that character, he remained Champlin‘s general consultant and advisor on energy problems. It has aptly been held, however, that one may simultaneously be a litigational expert with Rule 26(b)(4) protection as to some matters
and simply an unprotected actor or witness as to others,44 and at the very least the District Court was at liberty to subscribe to that principle. And to the extent that Owens, merely as a general consultant prior to his assignment to the Missouri litigation, may somehow have derived information bearing on the issues therein, the District Court‘s order leaves Marine free within normal limits to discover it.45 The truth of the matter, however, is that the record before us does not support any notion that Owens was in position to learn anything about Champlin‘s activities or motivations in price-setting merely in the capacity of general consultant. As portrayed by the record, the general consulting function consisted simply in a supply of information; a special engagement at a much higher cost was essential before the services of Owens’ firm became available for special projects. Indeed, had Champlin‘s need for advice on its problems with Marine been already accommodated by Owens’ general-consulting responsibilities, there would have been no occasion for the special assignment and the payment of the extra fees which the record undisputedly reveals.46 In sum, Champlin brought forth enough to indicate prima facie that Owens knew nothing helpful to Marine until the special assignment, nor thereafter except in the role for which he was specially retained.47 We perceive no basis for an assumption that there was more to the situation than that.
Rule 26(b)(4)(B) implicitly recognizes that a party might well be deterred from thorough preparation of his case were
Marine‘s final contention is that in any event there are “exceptional circumstances under which it is impracticable for [it] to obtain facts or opinions on the same subject by other means.”52 Marine is endeavoring particularly to accumulate evidence of wilful transgressions of the price regulations by Champlin, and thereby to recover treble damages.53 Marine represents, and Champlin does not deny, that in answer to interrogatories inquiring as to the identity of persons involved in its pricing determinations, Champlin supplied the names of two lay employees who later disclaimed participation therein and the names of two of its lawyers who subsequently invoked the attorney-client privilege. Because of assertions of that and other privileges, Marine states, it was unable to obtain information by deposing another Champlin executive.54 So, Marine says, only through Owens can it gain access to data it desperately needs.
Were the situation as imperative as Marine urges, the District Court‘s omission of express leave to pursue discovery from Owens on developments postdating his tenure as a litigational expert would give us con-
More fundamentally, we think Marine‘s approach to a solution to its assumed dilemma proceeds in the wrong direction. There is no rule or principle restricting access to facts possessed by Owens to discovery from Owens alone. As we read Rule 26(b)(4)(B), factual information, even when acquired in expectation of litigation, is shielded only if discovery is attempted from the expert, and not at all if the effort is to obtain it from a party or another sharing it. As one of the foremost authorities in the field has stated, “[o]bviously facts given by the party to the expert can no more be
protected by that fact than facts given to counsel by a party can be brought within the attorney-client privilege. The same should be true of facts known to a party through the expert.”58 The rule “precludes obtention of the information from the expert himself, and it precludes the identification of the facts or opinions as the work of the expert. It does not, it is submitted, excuse the party from disgorging what facts he may have in his possession. ...”59 Marine has and long has had the opportunity to secure from Champlin officials the full panoply of facts discoverable,60 and the corresponding opportunity to employ its own experts to formulate opinions thereon. In these circumstances, we cannot say that the District Court erred in treating Marine‘s situation as not exceptional.61
On the record before us, we sustain the District Court‘s holding that once Owens was engaged to aid Champlin in the forthcoming litigation, his information and opinions thereafter were acquired and developed as an expert assisting in preparation therefor. We sustain, too, the court‘s ruling that Marine did not meet the standard of exceptional circumstances which would nonetheless have entitled it to discovery from Owens. It follows that the order appealed from must be
Affirmed.
PER CURIAM.
Upon consideration of appellant‘s petition for rehearing, and the Court having reviewed the supplemental material added to the record on appeal, it is
ORDERED, by the Court, that appellant‘s petition for rehearing is denied for the reasons set forth in the opinion for the Court filed herein this date.
Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.
OPINION ON PETITION FOR REHEARING
SPOTTSWOOD W. ROBINSON, III, Circuit Judge:
Marine Petroleum Company petitions for rehearing of our decision sustaining the District Court‘s limitation on the scope of discovery obtainable from Charles R. Owens, Champlin Petroleum Company‘s consultant on energy matters.1 We found that the record adequately supported the central premise that Owens was an expert retained by Champlin in anticipation of litigation but one who would not be called as a witness.2 We held that
Our ruling left Marine free to depose Owens on his knowledge and views prior to July 7, 1975, when his engagement as Champlin‘s litigation expert began, but barred any probe into information developed by Owens thereafter.5
Our analysis of the record, as it then stood, led us to conclude during the decisional process that Marine had not met the specification of Rule 26(b)(4)(B) preconditioning discovery from a nontestifying litigation expert on “a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means ....”6 Marine expressly confines its petition for rehearing to this single facet of our decision,7 and refers us to discovery rulings, not heretofore brought to our attention,8 in the principal litigation pending in the District Court for the Eastern District of Missouri,9 where Marine has endeavored strenuously but quite unsuccessfully to obtain what quite accurately it denominates “Owens related documents and testimony.”10
From subpoenas duces tecum demanding production, by Marine‘s description, of “all communications by and between Owens and Champlin employees,”11 Marine has gained only limited access to those dated after July 7, 1975, because of consistent rulings that the great majority are protected at least by
In our earlier opinion, we expressed the view that “Marine‘s approach to a solution to its assumed dilemma proceeds in the wrong direction.”17 In explanation, we noted that “[t]here is no rule or principle restricting access to facts possessed by Owens to discovery from Owens alone,”18 and
that “Marine has and long has had the opportunity to secure from Champlin officials the full panoply of facts discoverable, and the corresponding opportunity to employ its own experts to formulate opinions thereon.”19 The record excerpts from the main action on which Marine relies serve to emphasize that once again Marine has missed the vital point.
The exceptional circumstances of which Rule 26(b)(4)(B) speaks are those “under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.”20 The “subject” referred to is not Owens’ testimony itself;21 rather, it is the group of topics upon which Marine would have Owens testify here, alleged price violations in petroleum sales by Champlin to Marine, and particularly the assertedly wilful nature thereof.22 Whatever might be said for Marine‘s claim of inability to approximate Owens’ personal versions through others, marine has yet to establish that it cannot “obtain facts or opinions on” those points “by other means.”23 As so
The petition for rehearing is
Denied.
tion to Supplement the Record on Appeal at 3-4. Marine harps on the obstacles to “Owens related documents and testimony,” text supra at note 10, but affords us no explanation as to why, with factual discovery so extensive, it cannot engage one or more experts of its own to express opinions on “the same subject” that Owens might have.
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Notes
(4) Trial Preparation: Experts. Discovery of facts known and opinions held by experts, otherwise discoverable under the provisions of subdivision (b)(1) of this rule and acquired or developed in anticipation of litigation or for trial, may be obtained only as follows:
(A)(i) A party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state the subject matter on which the expert is expected to testify, and to state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion. (ii) Upon motion, the court may order further discovery by other means, subject to such restrictions as to scope and such provisions, pursuant to subdivision (b)(4)(C) of this rule, concerning fees and expenses as the court may deem appropriate.
(B) A party may discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only as provided in Rule 35(b) or upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.
Rule 26(b)(1), referred to in Rule 26(b)(4), reads:(b) Scope of Discovery. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows:
(1) In General. Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.
Rule 35(b), referred to in Rule 26(b)(4)(B), relates only to physicians’ reports on physical and mental examinations authorized by Rule 37(a). Id.The policy behind the rule reflects the considered judgment that an expert specially employed by a party in anticipation of litigation may not be examined as freely as a person not occupying that special category. While facts are not to be hidden, nor necessary discovery improperly obstructed, neither is a party allowed to delve at will into an expert mind solely to sustain its own burden of preparing for litigation.